COMPARATIVE GUIDE
15 October 2024

International Arbitration Comparative Guide

International Arbitration Comparative Guide for the jurisdiction of Japan, check out our comparative guides section to compare across multiple countries
Japan Litigation, Mediation & Arbitration

1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

In Japan, the rules governing arbitration are set forth in the Arbitration Act (138/2003), which applies to arbitral proceedings where the place of arbitration is in Japan (Article 1 of the Arbitration Act). The current Arbitration Act is based on the 1985 UNCITRAL Model Law. Recently, a bill to amend the Arbitration Act to reflect the latest revision of the 2006 UNCITRAL Model Law passed the Diet. The amended Arbitration Act will take effect in or before April 2024. There are no significant limitations on its scope. As for arbitration agreements, an arbitration agreement must be executed in writing (which includes electronic form). Under the amended Arbitration Act, this requirement has been relaxed to some extent. To be specific, if a contract that has not been concluded in writing cites an arbitration agreement that was executed in writing or was recorded electronically or magnetically, the arbitration agreement will be deemed to have been executed in writing.

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

Although no distinction is made in the Arbitration Act, the Act on Special Measures Concerning the Handling of Legal Services by Foreign Lawyers defines 'international arbitration'. Foreign lawyers who are registered in Japan may represent clients in international arbitration; and foreign lawyers who are registered and act in foreign jurisdictions but who are not registered in Japan may represent clients in international arbitration only if the lawyer accepts the representation of the case in his or her registered country.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

The current Arbitration Act – which was enacted in 2003 and entered into force in 2004 – generally follows the 1985 UNCITRAL Model Law, with limited exceptions. In addition, on 21 April 2023, the bill to amend the Arbitration Act passed the Diet. The amendments aim to follow the 2006 UNCITRAL Model Law, which includes:

  • the definition and requirements for the issuance of interim measures; and
  • the relaxation of the requirements for a written arbitration agreement, as described in question 1.1.

The amended Arbitration Act also provides for the concurrent jurisdiction for arbitration-related court cases of the Tokyo District Court and the Osaka District Court. Arbitration-related cases are expected to be transferred to these two specialised courts, where judges who are well trained in arbitration cases are to be allocated. Further, the amended Arbitration Act allows the court to decide that a party need not submit Japanese translations of:

  • the arbitral award, whose translation the party seeking enforcement of an arbitral award must submit under the current legislation; and
  • evidence written in a foreign language, whose translation is customarily required since Japanese is the only official language of court proceedings under the current legislation.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

While some provisions are considered mandatory, there are also provisions that can be excluded by agreement of the parties, such as those relating to the place of arbitration and the applicable law.

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

As described in question 1.3, the bill to amend the Arbitration Act passed the Diet on 21 April 2023. The amended Arbitration Act will take effect in or before April 2024.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Japan is a signatory to the New York Convention and has made a reservation that it will apply the New York Convention to the recognition and enforcement of awards made only in the territory of another contracting state. However, since the Arbitration Act accepts the recognition and enforcement of arbitral awards regardless of the place of arbitration under substantially the same requirements as Article V of the New York Convention, this reservation under the convention has little meaning in practice.

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

A number of bilateral treaties have been concluded that include provisions for recognition of the validity of arbitration clauses/agreements and the recognition and enforcement of international arbitral awards, including the Treaty of Friendship, Commerce and Navigation between Japan and the United States of America (1953). Japan also ratified the International Centre for Settlement of Investment Disputes Convention in 1967.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Under the Arbitration Act, an arbitration agreement is effective only when it relates to 'a civil dispute (excluding divorce or separation disputes) for which the parties may reach a settlement, except as otherwise provided by law'. The parties may not refer labour-related disputes (excluding labour-union disputes) to arbitration. In addition, consumers may unilaterally terminate an arbitration agreement stipulated in a consumer-to-business agreement.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

Under the Arbitration Act, there is no provision limiting the choice of seat of arbitration for certain disputes.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

A valid arbitration agreement must:

  • be in writing;
  • meet the general validity requirements of an agreement;
  • cover arbitrable disputes (see question 2.1); and
  • include the parties' agreement that they will surrender to the decision of a third party (arbitrator) as a final and binding resolution of the dispute.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

Article 13(6) of the Arbitration Act provides that 'even if the clauses of the contract other than that of the arbitration agreement are not valid due to nullity, rescission or for any other reasons, the validity of the arbitration agreement shall not be impaired automatically'.

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

Under the Arbitration Act, if the parties do not agree on the language, the arbitral tribunal will determine the language. If the parties have not agreed on the place of arbitration, the arbitral tribunal will determine the place of arbitration by taking into account all circumstances of the dispute, including the convenience of the parties.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

Under the Arbitration Act, a jurisdictional challenge to the arbitral tribunal must be made:

  • promptly after the occurrence of the cause, if the cause has occurred during the course of the arbitration procedure; or
  • by the time of submission of the first written submission on the merits.

However, this will not apply when the arbitral tribunal finds justifiable grounds for a delay in making such challenge.

4.2 Can a tribunal rule on its own jurisdiction?

The Arbitration Act recognises the concept of kompetenz-kompetenz. An arbitral tribunal may rule on its own jurisdiction, including a ruling on any allegations relating to the existence or validity of an arbitration agreement.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

Under the Arbitration Act, a party to the arbitration may file a petition to the court requesting review of whether the arbitral tribunal has jurisdiction only if the arbitral tribunal has ruled that it has jurisdiction. If an arbitral tribunal has ruled that it does not have jurisdiction, the arbitral proceedings are terminated and the parties may not challenge such decision in court.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

Since an arbitration agreement includes an agreement to create an alternative dispute resolution method in lieu of litigation, the capacity to become a party to a litigation is required. While a partnership is a form of contract and is not recognised as an independent legal entity, it can be a party to litigation if:

  • a representative is designated; and
  • the partnership's assets are separately booked from the assets of individual members.

5.2 Are the parties under any duties in relation to the arbitration?

While not expressly stipulated in the Arbitration Act, the agreed rules of each arbitration institution may impose certain duties to the parties. For example, under the Japan Commercial Arbitration Association Commercial Arbitration Rules 2021 ('JCAA Rules'), parties are obligated to maintain confidentiality to a certain extent (Article 42(2)).

5.3 Are there any provisions of law which deal with multi-party disputes?

The Arbitration Act has no specific rules governing proceedings involving multiple parties, except regarding the number of arbitrators and the appointment of arbitrators. The rules of each arbitration institution have provisions for cases involving multiple parties. For example, the JCAA Rules contain provisions regarding:

  • the method of appointment of arbitrators in multi-party arbitrations (Article 29);
  • joinder in arbitral proceedings (Article 56); and
  • the consolidation of multiple arbitral proceedings (Article 57).

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The concept of 'separability' is recognised in Japan, and the governing law of an arbitration agreement is not necessarily the same as the governing law of the contract which includes the arbitration agreement.

Generally, the Japanese courts determine the governing law of the arbitration agreement pursuant to the Act on General Rules for the Application of Law (AGRAL), which provides that the governing law will be determined by the parties' express or implied agreement. Although this depends on the specific facts of each case, key factors that the tribunal/court relies on when seeking the parties' implied agreement on the governing law of the arbitration agreement include:

  • the governing law of the contract which includes the arbitration agreement; and
  • the law of the place of arbitration.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

Under the Arbitration Act, if the parties have agreed on the law to be applied in an arbitral award by the arbitral tribunal, the tribunal will uphold such agreement. If the parties have not agreed on the law to be applied, the arbitral tribunal will apply the laws and regulations of the state most closely connected to the dispute referred to arbitral proceedings.

With respect to the laws and regulations of 'the state most closely connected to the dispute' the tribunal will likely determine the governing law in line with the interpretation of the act which regulates the conflict of laws in Japan, the AGRAL. The laws and regulations of the 'place most closely connected' to the dispute, as provided in Article 8 of the AGRAL, are determined by taking into consideration:

  • objective circumstances such as:
    • the place of the act;
    • the place of performance; and
    • the habitual residence of the parties; and
  • subjective circumstances such as the intention of the parties.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

An arbitral tribunal may consolidate separate arbitrations into a single arbitral proceeding. For example, Article 57 of the Japan Commercial Arbitration Association (JCAA) Rules provides that the tribunal may consolidate and hear the pending claim(s) with the other claim(s) (as to which no arbitral tribunal has been constituted) if certain requirements are met.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

While the Arbitration Act is silent on this issue and leaves it to the tribunal's procedural discretion, usually under the agreed institutional arbitration rules, a third party may participate in arbitral proceedings that have already commenced and are pending, provided that:

  • the existing parties to the arbitration do not object; or
  • such joinder is contemplated in the arbitration agreement.

However, the tribunal may deny the joinder if there is a legitimate reason such as that joinder would delay the proceedings. For example, Article 56 of the JCAA Rules allows a third party to join the arbitral proceedings as a claimant or respondent under certain circumstances.

7.3 Does an arbitration agreement bind assignees or other third parties?

An arbitration agreement is binding on assignees and other third parties in certain cases, as follows.

Universal successor: An arbitration agreement will bind a universal successor (eg, a legal heir) to the rights and obligations relating to a dispute referred to arbitration, unless:

  • there is an agreement to the contrary; or
  • the agreement by its nature solely belongs to the predecessor.

Particular successor: It is controversial as to whether an arbitration agreement binds particular successors (eg, succession by contract) to the rights and obligations relating to a dispute referred to arbitration. There are some court decisions which have held that the effect of the arbitration agreement extends to the particular successor.

Representative of a corporation: It is understood that the effect of an arbitration agreement to which a corporation is a party could extend to the individual representative of the corporation if he or she negotiated and executed the arbitration agreement on behalf of the corporation, because the acts of such representative can be regarded as being equivalent to the acts of the corporation.

Guarantor: The effect of an arbitration agreement concluded by the principal debtor does not extend to the guarantor, unless the arbitration agreement is incorporated in the guarantee agreement.

8 The tribunal

8.1 How is the tribunal appointed?

Under the Arbitration Act, if the parties have agreed on the procedure for appointing arbitrator(s), including an agreement to adopt the rules of a certain arbitration institution, such agreement will govern. In certain cases – such as where a procedure for the appointment of an arbitrator provided by the parties' agreement is not complied with – the court will appoint the arbitrator.

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

Number of arbitrators: Under the Arbitration Act, the number of arbitrators will be as provided by agreement of the parties. In the absence of agreement, if there are two parties, there will be three arbitrators. If there are three or more parties, the number of arbitrators will be decided by the court upon the petition of a party.

Qualification of arbitrators: Arbitrators need not be lawyers. Under the Arbitration Act, when the court appoints an arbitrator, the court will pay due consideration to:

  • the requirements for the arbitrator as provided by the agreement of the parties;
  • the impartiality and independence of the person to be appointed; and
  • in certain cases, the nationality of the arbitrator.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

If the arbitrator fails to satisfy the requirements provided by the agreement of the parties or if there are reasonable grounds to doubt the impartiality or independence of the arbitrator, the parties may challenge such arbitrator. Unless the parties have specifically agreed otherwise:

  • the procedure for challenging an arbitrator must accord with the provisions of the Arbitration Act; and
  • a party must submit to the arbitral tribunal a written petition stating the grounds for the challenge within 15 days of the later of:
    • the date on which the party became aware of the constitution of the arbitral tribunal; or
    • the date on which the party became aware of the existence of any grounds for challenge.

8.4 If a challenge is successful, how is the arbitrator replaced?

Under the Arbitration Act, where the arbitral tribunal finds a challenge to be well grounded, the arbitrator's duties will terminate. If the arbitrator's duties are terminated by the decision on the challenge of the arbitrator, the method of appointing a successor arbitrator will be the same appointment method as applied to the appointment of the arbitrator whose duties have been terminated, unless otherwise agreed by the parties.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

Under the Arbitration Act, the parties must be treated equally and each must be given a full opportunity to explain its case in the arbitral proceedings. Arbitrators:

  • bear a duty of due care and diligence in hearing arbitral proceedings and making an arbitral award (Article 644 of the Civil Code); and
  • bear duties of confidentiality, good faith and loyalty as a part of their duty of due care and diligence.

The second sentence of Article 24(1) of the Japan Commercial Arbitration Association (JCAA) Rules provides that arbitrators shall be, and shall remain at all times, impartial and independent during the arbitral proceedings. Article 42(2) of the JCAA Rules provides that arbitrators shall not:

  • disclose facts related to or learned through the arbitral proceedings; or
  • express any views as to such facts.

During the course of the arbitral proceedings, an arbitrator shall, without delay, disclose to the parties all facts that would likely give rise to doubts as to his or her impartiality or independence (Article 18(4) of the Arbitration Act). In relation to this duty of disclosure, the Supreme Court of Japan has held that:

  • an 'advance waiver' does not exempt the arbitrator's duty of impartiality and independence; and
  • the arbitrator owes a continuous duty until the end of the arbitral proceedings to review his or her impartiality and independence (decision of the Supreme Court dated 12 December 2017).

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

Under the Arbitration Act, the arbitral tribunal may conduct the arbitral proceeding in such manner as it finds appropriate, unless this is contrary to the parties' agreement or violates the provisions of the Arbitration Act. The tribunal's discretion in relation to evidence includes the power to determine:

  • its admissibility;
  • the necessity of examination; and
  • its probative value.

An arbitral tribunal may hold oral hearings to have the parties produce evidence or state their opinions; however, if one party makes a request to hold oral hearings, the arbitral tribunal must hold the oral hearings at an appropriate stage of the arbitral proceedings.

(b) Interim relief?

Under the current Arbitration Act, an arbitral tribunal may order any party to take such interim measures as the arbitral tribunal considers necessary, unless otherwise agreed by the parties. However, such interim measures are not enforceable through the courts.

Under the amended Arbitration Act, an arbitral tribunal may order the following interim measures as specified in the Arbitration Act at the request of a party:

  • preserving assets to satisfy claims;
  • maintaining the current status quo of the parties;
  • prohibiting any conduct that is impeding the arbitral proceedings; and
  • preserving evidence for the arbitration.

Interim measures are enforceable in Japan once the court has ordered their enforcement (Articles 47 to 49 of the amended Arbitration Act).

(c) Parties which do not comply with its orders?

Order to take interim measures: As described in question 8.6(b), interim measures are not enforceable under the current Arbitration Act. Thus, the arbitral tribunal can only expect voluntary performance by the parties.

On the other hand, the court will be empowered to recognise and enforce interim measures issued by an arbitral tribunal under the amended Arbitration Act (see question 8.6(b)).

Request to make statements, testify or submit documents to a party or third party: The arbitral tribunal may, at its discretion, request a party or third party to make statements, testify or submit documents. If a party refuses to appear or testify without justifiable grounds, the arbitral tribunal may take this into account in rendering an arbitral award.

(d) Issuing partial final awards?

The arbitral tribunal may issue a partial final award in accordance with the agreement of the parties or the rules of the arbitral proceedings. A partial award which does not terminate the arbitral proceedings does not constitute an 'arbitral award' under the Arbitration Act, which is subject to a petition to set aside. A partial award, however, will qualify as an 'arbitral award' if the tribunal makes a final decision on such partial claim. The partial dismissal of a claim or defence based on the expeditious determination of manifestly unmeritorious claims or defences (summary judgment procedure) as set forth in Paragraphs 109 to 114 of the Guidance Note to the International Chamber of Commerce Arbitration Rules (Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration – 1 January 2021) will likely be considered a partial final award and will likely be subject to the setting aside of the arbitral award.

(e) The remedies it can grant in a final award?

There is no provision in the Arbitration Act regarding the remedies that a tribunal can grant in a final award. This is left to the tribunal's discretion, unless:

  • otherwise agreed by the parties (including the institutional arbitration rules which are incorporated into the parties' agreement); or
  • such remedies are in violation of the mandatary laws of Japan (eg, public laws or administrative laws).

An action seeking revocation of a resolution at a shareholders' meeting or invalidation of a new share issue cannot be subject to arbitration because:

  • such disputes cannot be settled between the parties; and
  • the admission of such actions would be effective against third parties.

In IP disputes, infringement injunction claims and damage claims may be subject to arbitration. However, since the authority to determine the validity of a patent rests exclusively with the Japan Patent Office, disputes concerning the validity of a patent cannot be subject to arbitration; although an arbitral tribunal may determine the validity of a patent as a precondition to a patent infringement suit.

(f) Interest?

Interest is determined in accordance with the governing law of the substance of the case.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

A so-called 'default judgment' is not allowed in arbitration. Under the Arbitration Act, even if a respondent has not appeared before the tribunal, the tribunal must continue the arbitral proceedings without treating such absence as the respondent's admission of the claimant's allegations.

8.8 Are arbitrators immune from liability?

An arbitrator generally owes a duty of due care and diligence (see question 8.5). Although there is no express provision in the Arbitration Act to this effect, the parties may agree that the arbitrator:

  • will be liable only in case of wilful conduct or gross negligence; and
  • will be indemnified in other cases.

Article 13 of the JCAA Rules provides that:

Neither the arbitrators, nor the JCAA (including its directors, officers, employees and other staff) shall be liable for any act or omission in connection with the arbitral proceedings unless such act or omission is shown to constitute wilful misconduct or gross negligence.

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Under the Arbitration Act, if a legal action which is the subject of an arbitration agreement is filed, the court must dismiss (not stay) the action without prejudice upon the petition of the defendant; however, this will not apply in exceptional circumstances, such as where:

  • the arbitration agreement is invalid; or
  • the defendant has already presented oral arguments on the merits in court.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

The Japanese courts have certain powers in relation to an arbitration seated in Japan, such as the following.

Challenge of arbitrator: Under the Arbitration Act, if a decision by the arbitral tribunal is made to the effect that the challenge of an arbitrator is groundless, the party that submitted the challenge may file a petition to challenge the arbitrator with the court.

Competence of the arbitral tribunal to rule on its jurisdiction: Under the Arbitration Act, if an arbitral tribunal has ruled that it has jurisdiction – including a ruling on any allegations on the existence or validity of an arbitration agreement – in an independent decision made before an arbitral award, a party may petition the court to rule on whether the arbitral tribunal has jurisdiction.

Examination of evidence: Under the Arbitration Act, an arbitral tribunal or party may petition the court to implement witness examination, expert testimony and other methods of examination of evidence provided for in the Code of Civil Procedure if the arbitral tribunal finds this necessary.

Anti-arbitration injunctions: It is considered that the court does not have the power to order an injunction against arbitral proceedings.

9.3 Can the parties exclude the court's powers by agreement?

Regarding the court's powers described in question 9.2, the parties may exclude the court's powers on the examination of evidence. However, the parties may not exclude the court's powers to decide on:

  • the challenge against an arbitrator; or
  • the jurisdictional challenge against the arbitral tribunal.

10 Costs

10.1 How will the tribunal approach the issue of costs?

Under the Arbitration Act, the parties may agree on the allocation of costs paid by the parties in relation to the arbitral proceedings. Although Article 42.1 of the UNCITRAL Arbitration Rules provides that the unsuccessful party bears the arbitration costs, there is no such provision in the Arbitration Act or the Japan Commercial Arbitration Association (JCAA) Rules. Under the JCAA Rules, the arbitral tribunal may apportion the costs between the parties, taking into account:

  • the parties' conduct throughout the course of the arbitral proceedings;
  • the determination on the merits of the dispute; and
  • any relevant circumstances (Article 80(2)).

In practice, in international arbitrations filed before the JCAA, the arbitral tribunal often follows the 'costs follow the events' approach and applies the principle that the unsuccessful party bears all or part of the arbitration costs within its discretion to allocate the costs.

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

Under the Arbitration Act, there is no provision limiting the parties' agreement on arbitration costs, and the parties may agree on the allocation of arbitration costs. If the parties have not reached an agreement, each party shall bear the costs it paid in relation to the arbitral proceedings. Since the rules of arbitration institutions usually state that the arbitral tribunal will determine the allocation of arbitration costs at its discretion, where the parties have agreed to arbitrate at an arbitration institution, the determination of arbitration costs is usually a discretionary decision by the arbitral tribunal, unless the parties have agreed otherwise.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

There is some concern that third-party funding may violate:

  • Article 72 of the Lawyers Act, which prohibits the provision of legal services by non-attorneys;
  • Article 73 of the Lawyers Act, which prohibits the enforcement of assigned rights as a business; and
  • Article 10 of the Trust Act, which prohibits trust for suit.

This notwithstanding, a third-party funder will not violate these provisions as long as it only provides funds to the parties and receives a share of the economic benefits that the parties derive from the outcome of the dispute.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

Under the Arbitration Act, the decision of an arbitral tribunal must be made by a majority of the arbitrators. The arbitral tribunal will apply:

  • the law agreed upon by the parties; or
  • if there is no agreement, the laws and regulations of the state most closely connected to the civil dispute that has been referred to the arbitral proceedings and which should be directly applied to the case.

If any of the following grounds exist, the arbitral award may be set aside (Article 44(1) of the Arbitration Act):

  • The arbitration agreement is invalid due to the limited capacity of a party;
  • The arbitration agreement is invalid on grounds other than the limited capacity of a party pursuant to the laws and regulations designated by agreement of the parties as those which should be applied to the arbitration agreement (or, if such designation has not been made, pursuant to Japanese law and regulation);
  • The party did not receive the notice required under Japanese law and regulation during the appointment of the arbitrators or in the arbitral proceedings;
  • The party was unable to defend itself in the arbitral proceedings;
  • The arbitral award contains a decision on matters that are beyond the scope of the arbitration agreement or of the petition in the arbitral proceedings;
  • The composition of the arbitral tribunal or the arbitral proceedings is in violation of Japanese law and regulation or the parties' agreement if the parties have reached an agreement on the matters concerning provisions unrelated to public order in such law and regulation;
  • The request for arbitration relates to a dispute which cannot be subject to an arbitration agreement pursuant to the provisions of Japanese law and regulation; or
  • The content of the arbitral award is contrary to public policy in Japan.

12.2 Must the award be produced within a certain timeframe?

Although there is no provision in the Arbitration Act regarding the deadline for rendering an award, the parties may agree on this. In addition, the Japan Commercial Arbitration Association (JCAA) Rules – which will be incorporated into the parties' agreement if agreed – imposes an obligation on the tribunal to use reasonable efforts to meet certain deadlines depending on the type of procedure and the amount in dispute. For example, Article 43(1) of the JCAA Rules provides that the arbitral tribunal must use reasonable efforts to render an arbitral award within nine months of the date on which it is constituted.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

An arbitral award (including a foreign arbitral award) becomes enforceable in Japan once the court has recognised and ordered its enforcement (Articles 45 and 46 of Arbitration Act). The grounds for refusal of such recognition and enforcement are almost identical to those for setting aside the arbitral award (see question 12.1). Under the current Arbitration Act, a petitioner seeking enforcement of an arbitral award must submit a Japanese translation of the arbitral award in addition to a certified copy of the award. The amended Arbitration Act alleviates this burden by giving courts the discretion to exempt the petitioner from the requirement to submit a Japanese translation of all or part of the arbitral award after hearing the opinion of the respondent (see question 1.3).

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

If any of the grounds set forth in Article 44(1) of the Arbitration Act exist (see question 12.1), the party may file a petition with the court to set aside the arbitral award.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

Under the Arbitration Act, a petition to set aside the arbitral award must be filed before the earlier of:

  • three months elapsing from the date on which the notice was given through the sending of a copy of the written arbitral award; or
  • the execution order becoming final and binding.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

Since Article 44 of the Arbitration Act, which provides for the setting aside of an arbitral award, is considered to have mandatory application, the parties may not exclude such right to set aside.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

The arbitrator usually bears a duty of confidentiality as part of the duty of due care and diligence. Article 42(2) of the Japan Commercial Arbitration Association (JCAA) Rules provides that the arbitrators, the parties and their counsel must not:

  • disclose facts related to or learned through the arbitral proceedings; or
  • express any views as to such facts.

15.2 Are there any exceptions to confidentiality?

Article 42(2) of the JCAA Rules provides for a duty of confidentiality. This duty of confidentiality does not apply where disclosure is required by law or in court proceedings or based on any other justifiable grounds (proviso to Article 42(2)). The exceptions to confidentiality include where:

  • timely disclosure is made in accordance with the listing rules of a stock exchange;
  • disclosure is requested by a criminal investigation authority; and
  • disclosure is made in the due diligence process of an M&A transaction after obliging the other party to maintain confidentiality.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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